Indonesia’s Bank Andara has partnered with Fundamo, a mobile financial services provider, to launch AndaraLink, a new network that is designed for microfinance institutions (MFIs). The new financial services network will enable MFIs to offer financial services to more than 40 million previously unbanked Indonesians through mobile terminals which are connected to a mobile network.
“MFIs need a fast, flexible, secure and innovative technical infrastructure to deliver financial services to a disparate populace in a cost efficient and scalable way,” said Irianto Kusumadjaja, chief operating and information officer at Bank Andara. “Instead of trying to reinvent the wheel, Bank Andara has combined existing MFI infrastructure with mobile technology to deliver new and enhances services.”
Kusumadjaja says that the financial services network that Bank Andara offers to MFIs has helped the bank to boost financial inclusion and grow market share, increasing revenues by 5-10% on average.
There are more than 50,000 MFIs in Indonesia and they enhance financial inclusion by offering credit, loans and savings to individual consumers and small businesses that are unable to access branch-based banking services in the country.
However, MFIs themselves need access to traditional banking infrastructure in order to facilitate the unbanked population, but there is no incentive for banks to establish infrastructure in low-income regions. These regions tend to have a high mobile penetration and that is where AndaraLink comes in.
“AndaraLink has enabled simple and inexpensive mobile financial services between existing MFIs, providing businesses and consumers with remittance and utility payments,” said Kusumadjaja. “The network will also help us provide MFIs with quick and easy access to capital allowing them to offer credit at better rates.”